Journal of Food Distribution Research Volume 48, Issue 1
Evaluating Overall Performances of the Banana Industry in West Bengal State, India
Esendugue Greg Fonsaha and Bani Aminb
aProfessor and REI Coordinator, Fruits and Vegetables Extension Economist,
Department of Agricultural & Applied Economics, University of Georgia, 2360 Rainwater Road, Tifton, GA 31793, USA Email: [email protected]
bDeputy Chief of Party, Feed the Future Bangladesh Agricultural Value Chains Project DAI-Bangladesh, House #05, Road #78, Gulshan-2, Dhaka-1212, Bangladesh
Abstract
With 29.7 million tons per annum, India produces 20% of world banana production. Despite this success, the country is not ranked as either a major or a minor banana exporting country. The goal of this exploratory research was to evaluate the banana sector in the banana producing areas of Kolkata, West Bengal State of India, in order to identify possible strengths and weaknesses that might impact the complete banana value chain (VC). We found major problems in the complete value chain, including production, transportation, distribution, marketing, and overall quality.
Keywords: banana, distribution, marketing, production, quality, transportation, value chain
Corresponding author.
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Introduction
With a volume of 29.7 million tons per annum, India is the largest producer of bananas in the world, accounting for about 20% of the world banana production. Despite this success, the country is not ranked as either a major or a minor banana exporting country. The principle goal of this exploratory research was to evaluate the banana sector in order to identify possible strengths and weaknesses that might impact the complete banana value chain (VC). We found major problems in the complete value chain, including in production, transportation, distribution, marketing, and overall quality.
By studying the banana value chain business model of the Keventer Agro Limited Company in Kolkata, we specifically set out to 1. Assess domestic banana production technologies in Bengal State; 2. Evaluate domestic and export market competitiveness; 3. Investigate SWOT (strengths, weaknesses, opportunities, threats) in the value chain; 4. Review India’s import/export policies for fresh fruits, with a special focus on West Bengal State.
Material and Methods
This exploratory research took place from July 5–10, 2015. During this time we visited almost all of the banana producing regions in the West Bengal State of India. We first visited Keventer Agro Limited Fresh Company, a Kolkata-based banana-ripening facility in Basarat. A field director was assigned to guide us through the production regions of the state up to the Bangladesh border. We also visited middlemen, stakeholders, cooperatives, and individual growers to collect production and marketing information aimed at tracing the complete banana value chain.
Most growers in Kolkata cultivate a G9 banana cultivar also known as “Grand Nain,” a Cavendish variety belonging to the Musa acuminate spp. (Fonsah and Chidebelu, 2012; Fonsah et al., 2007a,b; Fonsah et al., 2010). Grand Nain is classified as an AAA genotype and is a triploid, which makes it susceptible to disease pressures (Stover and Simmons, 1997; Robinson, 1995; Fonsah et al., 2007b). The word “Grand” is actually borrowed from French, meaning “Big” or “Big Bananas.” At this time, production is not a major problem in the Bengal State. Indian growers have some successful banana production and planting techniques that produce big, healthy banana bunches with an average bunch weight of 40 kg. Planting distance was 6 x 6 1 ft. with an overall density of 400 plants/bigha (Fonsah et al., 2005; Fonsah et al., 2006). Planting distance and density were the same for both G9 (Grand Nain) and local cultivars. Tissue cultures were obtained from Keventer. Various forms of N-P-K fertilizers were used but no one had ever done a soil test (Fonsah, 2003; Robinson, 2003; Fonsah et al., 2005).
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Findings
Good Agricultural Practices (GAP) and Quality
Good agricultural practices (GAP) are still lacking. For instance, no de-leafing or fruit obstacle removal were practiced. Bananas don’t do well with weeds. Additionally, fruit quality was compromised; fresh fruits were loaded and transported in trucks, increasing both quality defects and post-harvest injuries (Fonsah and Adamu, 2004; Fonsah and Chidebelu, 1995, 2012).
Disease Problems
The major problem in Indian banana production is disease, including yellow Sigatoka disease caused by Mycosphaerella musicola and black Sigatoka caused by Mycosphaerella fijiensis. There is also banana bunchy top virus (BBTV), which can spread fast if not well controlled. However, due to the production cycle—which goes through mother-daughter-granddaughter or plant crop – first and second ratoon—before crop rotation takes place, it might be easier to manage the disease pressures economically. The three-crop cycle takes from 27 to 30 months (Fonsah and Chidebelu, 1995; Fonsah and Chidebelu, 2012; Stover and Simmons, 1987; Robinson, 1993; Robinson, 1996 Fonsah et al., 2010).
Production Costs
On an average, total annual production cost for a G9 banana farm is about 60,000 rupees2/bigha. Producers reported total net returns of about 300,000 rupees (INR) in a two-year farming cycle constituting three harvests. Total reported production costs for the local variety were 80,000 INR, which and generated net returns of approximately 200,000 INR in a 27-month farming cycle with three harvests. High profitability was causing farmers to switch from Jute-plant production to bananas (Fonsah et al., 2007a; Fonsah et al., 2007b; Fonsah et al., 2011).
Banana Retail Prices
The supermarket in downtown Kolkata displayed four kinds of bananas on the shelf: the Cavendish (G9), two local varieties that looked like Champa-kola and Shabri-kola, and— surprisingly—a local organic banana. The G9 sold for 30 INR/kg. The organic option sold for 35 INR for four small fingers and the two local varieties sold for 6 INR and 5 INR/finger each, respectively. Banana blossoms, which are eaten as a vegetable in some Asian countries, were also available for purchase at 27 INR each. This product could be a readily exploitable niche market. Most farmers did not know that banana flowers could be eaten; they cut and threw them in the field.
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Banana Supply Value Chain Model
Market Share and Profit Margins
We were told that an operation like Keventer requires a supply of 10 metric tons (MT) of fruit per day to be sustainable. At the moment, Keventer has exceeded that target fourfold, producing 40 MT/day in seven ripening chambers. Kolkata consumes around 400 MT of bananas daily; Keventer supplies approximately 40 MT/day, roughly 10% of total market share, which leaves them room for expansion. Expansion plans are being finalized, with the aim of opening facilities in Siliguri and Ranchi (Jharkaand), each with a capacity of 10 MT/day (Fonsah et al., 2011).
Infrastructural set-up costs for a small ripening operation with a 10 MT/day capacity are 7–8 million INR. Including working capital, the required investment is about 20 million INR. In West Bengal the peak season for banana is the Ramadan Holy Season, when bananas are important for Iftar.
Import/Export
Presently, demand for bananas in India is higher than supply. As a result, import/export ventures are not appealing to businesses. Moreover, Indian import/export policies for fresh produce— especially bananas, which are a staple—are a major hindrance with too many bottlenecks involved. Trade barriers between India and Bangladesh have encouraged smuggling practices and discouraged official import/export trading between the two countries. Many tariffs and non- tariff barriers discourage businesses, especially for perishable goods like bananas.
World Banana Suppliers
Recent reports show that India ranks first in terms of world banana production, followed by China and the Philippines. Most big producers are not exporters. It is possible that their production is just enough for local consumption, creating an equilibrium. Empirically, the story might have another twist. If modern banana agricultural production technologies could be implemented to improve overall quality to meet export requirements, then India could be a player in the banana export market by producing for both domestic and foreign markets.
Conclusion
Although India is the largest producer of bananas in the world, they have not yet exploited their full potential to become producers, marketers, and exporters of premium quality bananas. Domestically, India has huge market demand and per capita consumption is skyrocketing. Projections show that India will surpass China and become the most populated country in the world by 2028. Given this growth rate, demand for bananas—a favorite fruit—will continue to increase. The problems plaguing the industry are pest and disease control and a lack of modern agricultural practices in producing quality bananas. If producers opt to attempt exporting they will need to address these issues (Fonsah, 2002). A Total Quality Management (TQM) strategy
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(an integrated banana management approach) is recommended to revamp the entire India banana industry, which would render Keventer Agro Limited even more profitable and efficient.
Recommendations
Although India leads Bangladesh in banana production and marketing, the country trails other banana-growing countries, especially exporting countries in Africa, Central and South America, and Asia (particularly the Philippines). Keventer Agro Limited and other companies that have developed models to improve the entire banana value chain in India deserve recognition and praise. However, their models are still below international norms and standards. Fortunately, there is a high degree of willingness to learn and improve. USAID/DAI can capitalize on that willingness and provide necessary assistance through transferred technology, capacity building, training, and education.
Acknowledgement
This study was funded by the USAID/DAI Feed the Future India Agricultural Value Chains Project for which the authors are indebted and grateful. We are equally thankful to the Management of Keventer Agro Limited Fresh for sharing their experience with us.
Notes
1A bigha is approximately equal to 0.4005 acres. However, in Punjab, 4 bigha = 1 acre
2One (1) Indian rupee = $0.015 (as of October 23, 2016).
References
Fonsah, E. G. 2002. “An Integrated Quality Control Management Strategies in Banana Production, Packaging and Marketing.” Journal of Food Distribution Research 34(1):99– 106.
Fonsah, E. G., and A. C. Adamu. 2004. “Bites as Banana Planting Material: A Determination of Growth Performance Three Weeks after Corns Were Extracted in the Tropics.” Journal of Applied Social Science 4(2):162–170.
Fonsah, E. G., A. C. Adamu, B. Okole, and B. Mullinex. 2007b. “Field Evaluation of Two Conventional and Three Micropropagated Cavendish Banana Cultivars over a Six Crop Cycle IN A Commercial Plantation in the Tropics.” Fruits 62(4):205–212.
Fonsah, E. G., B. Borgotti, P. Ji, P. Sumner, and W. G. Hudson. 2010. “New Banana Cultivars Trial in the Coastal Plain of South Georgia.” Journal of Food Distribution Research 41(1):46–50.
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Fonsah, E. G., and A. S. N. D. Chidebelu. 2012. Economics of Banana Production and Marketing in the Tropics: A Case Study of Cameroon. Bamenda, Cameroon: Langaa RPCIG.
Fonsah, E. G., W. G. Hudson, P. Sumner, and J. Massonnat. 2011. “Performance of ‘Veinte Cohol’: A Short Cycle Banana Cultivar Trial in the South Coastal Plain of Georgia.” Journal of Food Distribution Research 42(1):48–53.
Fonsah, E. G, G. Krewer, and M. Rieger. 2003. “Banana Cultivars Trial for Fruit Production, Ornamental Landscape Use and Ornamental Nursery Production in South Georgia.” Journal of Food Distribution Research 35(1):86–92.
Fonsah, E. G, G. Krewer, and M. Rieger. 2005. “Second Year Banana Cultivars Trial in South Georgia.” Journal of Food Distribution Research 36(1):48–54.
Fonsah, E. G., G. Krewer, and R. Wallace. 2006. “Third Year Banana Cultivars Trial in South Georgia.” Journal of Food Distribution Researc, 37(1):71–75.
Fonsah, E. G., G. Krewer, R. Wallace, and B. Mullinex. 2007a. “Banana Production: An Alternative Crop for Niche and Ethnic Market in Georgia.” Journal of Food Distribution Research 38(3):14–21.
Robinson, J. C. 1993. Handbook of Banana Growing in South Africa. Nelspruit, South Africa: Agricultural Research Council, Institute for Tropical and Subtropical Crops.
Robinson, J. C. 1996. Bananas and Plantains. Wallingford, Oxfordshire: CAB International.
Stover, R. H., and N. W. Simmons. 1987. Bananas: Tropical Agriculture Series, 3rd ed. New York: Longman Scientific & Technical.
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